New strides in the application of lean manufacturing principles are achieving surprising new gains and innovative solutions for maintenance, repair and overhaul operations (MROs).

Imagine an aircraft MRO that runs like clockwork. Technicians, inspectors, engineers, support vehicles and material handlers all roll out at preset times to carry out their work. The operations of each work area are synchronized and the flow of work is clear to each employee from start to finish. Systems are in place to alert management at regular intervals if flow breaks down and since stoppage triggers standard responses, a predetermined response occurs to get flow started again. Simultaneously, a team analyzes the problem and implements a solution to prevent it from reoccurring.

Does this image sound like pure fantasy? It shouldn’t because it depicts the implementation of lean manufacturing in MRO that has been utilized by a significant portion of the aviation industry to achieve outstanding results. Lean techniques can achieve sustainable improvement throughout production, repair and business processes leading to continuous growth in market share and profits. One example is the significantly improved turnaround time for airplane engine overhaul and repair recently achieved by Delta TechOps (See AM April 2007, page 16). Lean manufacturing principles also have sparked the development of more sophisticated, software-based, support tools for better managing the aviation parts supply chain.

Achieving Flow

One of the great appeals of lean manufacturing is its simplicity. Lean techniques cut costs by eliminating waste. These reductions paradoxically increase quality as production problems become more visible and root causes more easily identified and remedied.

In the aviation industry, the best way to eliminate waste is to achieve the lean principle of continuous flow — producing and moving one item at a time through a series of processing steps as continuously as possible, with each step making just what is requested by the next step. A highlight of Six Sigma quality management, lean production is aimed at the elimination of waste in every area of operations. The objective is to incorporate less human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.

Flow at MROs is hard to conceive when an airplane goes into a hanger and sits while it is getting repaired. How do you create flow when something doesn’t move? It is an especially challenging proposition in an environment of complex products with high variety and lower production volume.

Lean expert and aviation industry consultant Kevin Duggan, principal of Duggan Associates and author of Creating Mixed Model Value Streams, has observed that many MROs incorrectly define lean manufacturing strategies as continuous improvement achieved purely by identifying waste and eliminating it. Instead, Duggan argues that lean techniques should provide knowledge to MROs for using a structured, step-by-step process to identify and eliminate waste strategically.

According to Duggan, the same concept of flow (both material and information flow) between two operators within one cell has to be applied to the entire MRO operation. Flow is created at the cell level by using One Piece Flow techniques, which is a Kaizen manufacturing strategy that means each person or process works on one piece at a time before it is pulled downstream. Flow is continued at the value stream level by connecting processes or cells with first in, first out (FIFO) systems. The goal is to flow value at the rate of customer demand, and flow it in such a way, that it can be seen when flow stops.

Value Stream Mapping

Changing demand, inspections uncovering different types of repair along with varying time to perform the repair, all make the implementation of a lean value stream — all the activities performed to bring a product from raw material to the customer — difficult for aviation MRO operations. Duggan recommends MROs use a 12-step process to define their lean value stream:

1. Product Families & Matrix — Determine grouping by work content.

2. Takt Time — A Six Sigma principle that is the maximum time allowed to produce a product in order to meet demand. In MRO, Takt Time is "our capability to meet changing customer demand." Consider establishing two to four different capability levels that best fit business volume swings.

3. Finished Goods Strategy — Consider a finished goods inventory to support erratic demand. There needs to be a strategy to tell the value stream what to build and when to build it, and that strategy should not be based on what the materials manager dictates.

4. One Piece Flow — From the time a part is stripped off a plane, it should follow a path of One Piece Flow as much as possible.

5. FIFO — Apply FIFO when parts flow through different processes that have different cycle times and One Piece Flow if these processes cannot be achieved.

6. Implement Pull Systems Last — In MROs, pull systems are often implemented first when they really should be the last technique used to manage inventory and flow. The best use of pull systems is in raw material supply with vendors and managing finished goods for spare parts.

7. Equip To Support Takt Time — Equipment loading should be performed to evaluate cycle time for each product in the family, respective demand for the part, number of machines available, number of hours available and uptime.

8. Determine Equipment Interval — Equipment interval should be based on machine loading and available time left for changeover. If a part number is run once per week, the quantity of part produced for each run should be one week’s worth.

9. Try To Schedule One Point, The Pacemaker — Find the place where flow ends and schedule to it. That’s your pacemaker. From that point, flow downstream to the customer and pull upstream (usually from raw materials).

10. Determine Pacemaker Interval — How many part numbers can be scheduled and during what period of time at the pacemaker? Establish this number and schedule to it.

11. Pitch or Management Time Frame — Determine how often to schedule and physically remove work at the pacemaker.

12. Preset Modes To Respond To Changing Customer Demand — Create multiple future state value streams on paper to respond to customer demand that exceeds what a value stream mode is designed to do.

Case Study: Delta TechOps

By applying some innovative new twists to traditional lean manufacturing techniques, Delta TechOps has hugely increased production and profits during the past year without any increase in resources. The objective was to increase profits by reducing the turn times of its airplane engine MRO operation. In 2006, Delta TechOps increased the speed of repair of all piece parts by 40 percent as compared to the baseline for 2005 and reduced the amount of time each engine was in-house by 20 percent. Since it attained this improvement by opening up capacity without increasing resources, Delta TechOps also surpassed its 2006 plan for in-sourcing revenues by tens of millions of dollars.

With more than 100 customers, Delta TechOps is the largest airline third-party maintenance provider in North America. It repairs six different engine models: Pratt & Whitney PW2000, PW4000 and JT8D-219; and GE/CFMI CFM56-3/7, CF6-80A42/C2 and CF34. When it started its turn time improvement effort, some 20,000 pieces flowed through MRO at any one time. Today, that number has been cut by more than half (a total value of some $10 million) and simultaneously, the average number of engines repaired each month has increased by 18 percent.

How did Delta TechOps pull it off? By maintaining a laser focus on where flow stopped. Managers combined the lean principle of achieving continuous flow with the Theory of Constraints — an overall management philosophy based on the premise that the rate of revenue generation is limited by at least one constraining process (i.e. a bottleneck) and by increasing throughput (flow) at the bottleneck, process overall is improved.

"We identified the constraint in our MRO as piece part repair and support," said Gary Adams, manager for continuous improvement at Delta TechOps. "Next, we started to process map by looking for waste in the system. It’s like increasing the speed water runs through a river. If you remove the damns, the river runs faster and more fluidly."

The single most important change made by Adams and his team was applying new controls over the amount of inventory in the system.

"In the past we tore down an engine and pushed the parts into the system as quickly as possible with the belief that would turn the engine around at the highest possible rate," Adams said. "Imagine our surprise when we discovered the opposite occurred. As the parts flooded into the repair process, there were too many parts for repair put into the hands of our aviation maintenance technicians. The flood of parts motivated technicians to multi-task and shift priorities more often. In short, it created so many options that technicians became less focused and less productive. The process overloaded the constraint we had identified and resulted in engines coming out slower."

To develop the best solution, the continuous improvement team performed activity sequencing of the steps necessary to tear down an aircraft engine to the piece-part level. Next, they experimented by altering the sequence of when parts were released in the system. They decided that rather than pushing them out as quickly as possible, they would release parts based upon a schedule for when they would be needed for assembly. This minimized the amount of parts in the system at any one time. Fewer parts in the system speeded piece repair times overall.

The more complex the environment, the simpler a solution must be. With that in mind, Adams and his team set three simple, priority-based goals — red, expedite and FIFO — and established a mistake-proof work process reflecting those priorities.

Next, the team set the very aggressive goal of 15 days for piece parts repair. This meant that rather than flooding the system with parts, they would be staggered into the system until 15 days before they were needed for assembly. It was a stunning move in comparison to the previously established repair time of 60 days. The other 15 percent of parts were released right away based on determinations that their repair could take longer than the 15 days allotted.

"I was concerned we were going to get laughed out of the building because piece parts repair had always taken about 60 days," Adams said. "We were declaring to the technicians, you now have a maximum of 15 days, you have fewer parts to deal with at any one time and you aren’t responsible for anything but these three priorities — FIFO, red tag and expedite tag."

The key insights Adams and his team took away from the implementation of the new system were big picture analysis, inclusion and communications.

"Every system has a constraint, so you need to take a picture of your system with a wide-angle lens rather than focus on making individual areas work as efficiently as possible," Adams said. "You have to understand the overall constraint and techniques, like lean, to fix that weakest link. Inclusion also is vital. We could come up with solutions all day long as a management team, but the people who perform the repair job must have ownership in creating the solution. Everyone has to understand the value of the change. Finally you have to communicate — the goals must be clear and simple and you must continue to communicate them at least 20 times a day."

Supply Chain Disconnect

According to Duggan, there is huge disconnect in MROs between how lean manufacturing is viewed for the supply chain versus the operation floor. On the shop floor, each process has a formal connection to the next process through One Piece Flow, FIFO and other techniques. But in the supply chain, MRO organizations typically don’t think of formal connections.

"They focus on buying parts and chasing parts to make sure they show up on time," Duggan said. "Think of it this way, if your supplier production process is down for two minutes do you want to know about it? If they are down for two weeks, do you want to know about it?" Duggan stated. "In other words, lean in the supply chain creates formal connections with the supplier that enables you to see the flow of work and know when that flow breaks down."

In fact, this issue has sparked the development of a variety of software solutions to help improve supply chain flow in MRO. One example is "Service Planning and Optimization" (SPO) from MCA Solutions. It helps MROs manage and optimize spare parts inventory by identifying the perfect parts stocking level and the ideal stock location. By forecasting and optimizing spare parts inventory for planned and unplanned maintenance — it right sizes inventory and creates an increasingly lean environment for MRO.

"It’s crucial for MROs adopting a lean methodology to leverage a solution that helps minimize spare parts inventory investment without sacrificing the availability of the aircraft," said Bob Salvucci, president and CEO of MCA Solutions. "SPO takes the guesswork out of spare parts planning by determining the perfect mix of parts and inventory levels while identifying the best possible stocking location which helps minimize risk across a global network."

Duggan affirms that supply chain flow software solutions can be a great asset in MRO, but only if they are used correctly. "If we use a software solution to find part shortages and hammer suppliers, it is just another hammer," Duggan said. "If we use it to analyze and improve the flow of the supply chain as an overall process, it is truly useful."

The Bottom Line

Duggan defines the ultimate goal of lean manufacturing in MRO as "operational excellence" which he defined as: "when each and every employee can see the flow of value to the customer and fix that flow when it breaks down." The real power of lean is implementing a lean value stream that yields bottom line results for the MROs and its customers.

Under the 15 days system, the priority of parts in each repair shop was:

1. Expedite — Parts tagged expedite would always take highest priority.

2. Red — At five days before a part is needed for assembly, the part is tagged red. Each shop works red parts immediately following any expedite tagged item.

3. FIFO — Outside of any priority tag, each part is worked FIFO until it reaches the five-day mark that mandates it be tagged red.